Geneva (AFP) – World airlines are “cautiously optimistic” for 2025, the industry body’s head told AFP on Tuesday, while slamming the big plane manufacturers for not delivering new aircraft fast enough. Although a record 5.2 billion passengers and increased profits are expected next year, International Air Transport Association’s (IATA) Director Willie Walsh said many in the industry were “frustrated” at Boeing and Airbus for holding the industry back.
Speaking to AFP from the IATA’s headquarters in Geneva, Walsh hailed 2024 as a “good year,” with industry revenues topping the $1 trillion mark for the first time on the back of falling oil and fuel prices. Despite forecasts of fuel prices falling further and an increase in profitability to 3.6 percent — “not very impressive” compared to other industries — the IATA chief refused to sound too triumphant. “When I talk to airline CEOs, I think they’re optimistic, but they’re cautiously optimistic,” Walsh said. That caution was partly a result of the post-Covid-19 pandemic hangover which hit airlines especially hard, he said.
But the big dampener on the celebratory mood was the niggling supply chain issues which have seen manufacturers deliver only 1,254 aeroplanes to airlines in 2024 — 30 percent fewer than had been predicted.
With a backlog of 17,000 undelivered planes outstanding, airlines were “very frustrated,” especially with big players Boeing and Airbus, Walsh said. “I think it’s actually bordering on anger now because it’s gone on for so long,” he added. Boeing saw its production hit this year during a nearly two-month strike by workers, while rival plane-maker Airbus in June lowered its production target for the year to 770 from 800. “We expect better from these major players. They continue to do well from a financial point of view themselves, but they’re transferring a huge burden to the airline industry,” Walsh said. “And quite honestly, you know, it’s just not good enough.”
Part of the issue came down to decreased reliability, with around two percent of the world’s planes grounded for inspection — “about 700 aircraft” according to Walsh. “The reliability, the robustness of the engines, the new technology is not where we would expect it. So, we’re seeing engines coming off the wing, going into the repair shop much sooner than was expected,” Walsh said. “So, it’s very disappointing.”
With more and more governments — particularly in Europe — mulling increased taxes on air transport, in part to meet their climate commitments, Walsh urged politicians to consider their economic consequences. “Aviation is a major contributor to economic growth in Europe and has facilitated massive change in Europe,” the IATA chief said. “I think governments need to be careful. They often look at this industry as a source of taxation for additional revenues without understanding the negative impact that that’s going to have,” Walsh added.
He cited the case of France, which put forward a proposed tripling of a levy on airline tickets, as well as on private jets. “These taxes will have a big impact on the airline industry, but they’ll have a big impact on consumers and politicians often gloss over that,” Walsh said. “The reality of it is consumers will end up paying the bill, because the airline industry can’t absorb these additional costs without passing them on to the consumer. So this is an issue that damages consumers, damages the economy, and I think politicians need to be much more careful.”
Many environmentalists have argued that polluting industries such as aviation need to pay more to account for their fossil fuel consumption that drives climate change. A global tax on aviation to finance climate action for poorer countries has received the backing of France, Kenya, and Barbados, as well as of United Nations chief Antonio Guterres.
© 2024 AFP
